In Mexico, the concept of the controlling beneficiary is not new; it emerged as part of legislative reforms aimed at combating money laundering and the financing of terrorism. However, in recent months, the Tax Administration Service (SAT) has intensified its oversight in this area, making compliance a top priority for all companies.
A controlling beneficiary is any individual who ultimately exercises effective control over, or derives benefit from, a legal entity or structure.
Why Is This Important?
Compliance with controlling beneficiary obligations is far more than a formal requirement. Non-compliance may result in significant consequences, including:
- High Financial Penalties: Economic sanctions may reach millions of pesos.
- Reputational Risk: Non-compliance can harm the company’s standing with clients, partners, and investors.
- Impact on Corporate Relations: Authorities and strategic partners may question the reliability, transparency, and governance standards of a non-compliant entity.
What the Tax Administration Authority (SAT) Seeks to Achieve
The objective of SAT’s controlling beneficiary verification process aims to ensure:
- Transparency in corporate and ownership structures
- Clear identification of the true beneficial owners
- The existence of updated, accurate, and verifiable information
In this context, the question is no longer if the Tax Authority will review your company, but rather when, what aspects will be reviewed, and how the review will be conducted.